Volkswagen ID4 Gets the $7,500 Tax Credit in 2024

By
Laurance Yap
March 18, 2024
3
min
Built in Chattanooga, Tennessee, the Volkswagen ID.4 is one of the top 10 selling electric cars in the U.S. It continues to qualify for the $7,500 tax incentive - and the better news is that the 2024 model year will also bring some impressive updates.
Woman opening the trunk of her Volkswagen ID4 by a park
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American-Made VW Qualifies for EV Credits

In the last few weeks, we’ve reported on a number of changes around EV tax credits in 2024. On the one hand, actually getting the federal government’s electric car incentive is going to be easier than ever, as dealerships can now apply the credit simply as a price reduction on the car (instead of you having to wait till tax time for a refund). On the other hand, the list of vehicles actually eligible for the tax credit if you purchase is getting shorter.

Tightening restrictions around where electric and plug-in hybrid vehicles are assembled, and where their battery components and critical minerals come from, have eliminated many popular vehicles from receiving the full tax credit in 2024. The biggest change for next year comes from a new stipulation saying that battery minerals and components cannot come from “foreign entities of concern” (FEOC). Popular vehicles that are no longer eligible for the full incentive include the Nissan Leaf, Ford Mustang Mach-E, and even the wildly popular Tesla Model 3.

Blue Volkswagen ID4 front view

ID.4 Qualifies for $7,500 Incentive

Earlier this year, it looked like the Volkswagen ID.4, which is made in Chattanooga, Tennessee, would see its eligibility for the incentive halved due to the composition of its battery, therefore qualifying for just $3,750 and not $7,500. But recent updates to the Department of Energy’s website now indicate that the ID.4 will actually receive the full $7,500. That’s good news if you’re in the market for the electric Volkswagen.

The ID.4 is one of the most popular electric vehicles in America, having occupied a space on the list of 10 best-selling EVs for the last couple of years, but sales of the vehicle have slowed, and there are now good deals to be had for vehicles currently sitting on dealer lots. Even better news is that the 2024 model year cars will come with a number of excellent upgrades.

Volkswagen ID4 back view exterior

Upgraded Performance and Range

2024 Volkswagen ID.4 models, at least those which are fitted with the 82-kWh battery, get a brand new, and more efficient drive unit that increases performance and range. Power jumps from 201 hp for 2023 models to 282 hp in rear-wheel drive models, and 295 hp to 330 hp in all-wheel drive models.

Even better, EPA-estimated range for rear-wheel drive models jumps from 291 miles, 16 miles more than before, while all-wheel drive models jump 8 miles to 264 miles. Models fitted with the smaller 62-kWh battery continue with their existing range and performance estimates.

There are also some significant upgrades inside. 2024 models with the larger battery get a larger 12.9-inch display for infotainment and climate control functions. Even better, the sliders for the volume and temperature controls are now backlit, addressing one of our major complaints with the original ID.4. The gear shifter has been relocated to a better position, and the touch controls on the steering wheel have been improved. Upscale S models get a new premium Harman/Kardon audio system, as well as ventilated front seats, making the car more comfortable in all seasons.

Volkswagen ID4 side profile exterior view

Volkswagen ID.4: Availability and Pricing

If you are hunting for a bargain and don’t need the extra power or range, finding a 2023 model year ID.4 on a dealer lot may be your best way to a deal, especially after you apply the $7,500 incentive. Standard models have a starting MSRP of $38,995; Pro models with the larger battery have a starting MSRP of $43,995, and all-wheel drive models start at an MSRP of $47,795.

Of course, if you’re looking at one of the ID.4’s many electric crossover competitors, some of which aren’t eligible for the purchase incentive, remember that almost any EV qualifies for a $7,500 incentive if you lease – which may still be the best route to acquiring an EV as the technology rapidly evolves.

Front view of a Tesla Model 3 driving through canyon roads

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